Management 490 Chapter 6 Part 1

The given correct answer, "Direction Setting," refers to the process of establishing and communicating the organizational mission, vision, enterprise strategy, and long-term goals. This involves defining the purpose and direction of the organization and ensuring that all employees are aligned and working towards the same objectives. Direction setting is crucial for providing clarity and guidance to the organization, enabling effective decision-making, and driving the achievement of long-term goals.

The correct answer is "Development of Corporate Level Strategy". This is because the development of corporate level strategy involves making decisions about which resources and capabilities to focus on in order to build distinctive competencies that will give the company a competitive advantage. By selecting the right resources and capabilities, the company can create a unique position in the market and differentiate itself from competitors. This process involves identifying the company's strengths and weaknesses, as well as opportunities and threats in the external environment, and then formulating a strategy that aligns these factors with the company's overall goals and objectives.

Final Product Manufacturing refers to the process of creating a product that is in its final form and ready for consumption. This involves all the necessary steps, such as assembling, packaging, and quality control, to ensure that the product meets the desired specifications and is ready to be sold to the end consumer. This term distinguishes the stage of production where the product is fully manufactured and does not require any further processing before it can be used or consumed.

Primary manufacturing refers to the initial stage of the manufacturing process where raw materials are converted into intermediate products. In this case, timber and crude oil are the raw materials that undergo primary manufacturing to become commodities like wood pulp and iron. This process involves basic processing and transformation of raw materials, often done in specialized facilities or factories. The resulting intermediate products can then be further processed and transformed in the final product manufacturing stage to create finished goods for consumers.

Vertical integration refers to the extent to which a firm is involved in multiple stages of the industry supply chain. It involves the firm expanding its operations by acquiring or merging with companies at different stages of the supply chain, such as suppliers or distributors. This allows the firm to have more control over its inputs and outputs, reduce transaction costs, and potentially gain a competitive advantage. Vertical integration can also help in ensuring a steady supply of inputs and securing distribution channels, thereby improving efficiency and profitability.

This answer is correct because it accurately identifies one of the methods of diversification, which is the selection of tactics for diversification and growth. This method involves choosing various strategies such as internal venturing, acquisitions, and joint ventures to expand and diversify a company's business portfolio. By selecting the right tactics, a company can effectively pursue growth opportunities and mitigate risks associated with concentrating its resources in a single business or industry.

A concentration strategy refers to the approach taken by organizations that focus their resources and efforts on a single or a small group of products and services within a single market. This strategy allows organizations to specialize and become experts in their chosen market, enabling them to gain a competitive advantage. By concentrating on a specific market segment, organizations can better understand customer needs and preferences, tailor their offerings accordingly, and establish a strong market position. This strategy is particularly useful for organizations that have limited resources and want to maximize their impact within a specific market.

The correct answer is "Management and Resources." This answer suggests that in order to develop business-level strategies and an appropriate management structure for the corporation, effective management and allocation of resources are essential. This implies that without proper management and allocation of resources, it would be challenging to develop and implement effective strategies and structure for the corporation.

Concentration strategy refers to focusing on a single product or market segment. While this strategy can lead to specialization and competitive advantage, it also carries the risk of product maturity and obsolescence. This means that if the product becomes outdated or reaches its peak in terms of market demand, the company may face significant challenges. Therefore, concentration strategy can be risky as it heavily relies on the success and longevity of a single product or market segment.

A concentration strategy refers to focusing on a single product or market segment. This strategy can lead to uneven cash flow and profitability because the company becomes heavily dependent on the success of that specific product or market. If there are any fluctuations or downturns in that particular segment, the company may struggle to generate consistent revenue and profits. This lack of diversification can make the company more vulnerable to economic changes and competitive pressures.

The given answer is "Development of Corporate Level Strategy". This is because the question mentions different approaches to corporate-level strategy, such as concentration, vertical integration, diversification, and international expansion. Out of these options, "Development of Corporate Level Strategy" is the most fitting answer as it encompasses the overall process of formulating and implementing strategies at the corporate level.

Related diversification refers to a corporate strategy where a company expands its operations by entering into new markets or industries that are related to its existing core competencies or technologies. In this scenario, the company has chosen to manufacture products that leverage its core competencies, which indicates a strategy of related diversification. This strategy allows the company to capitalize on its existing strengths and knowledge while expanding its product offerings and market reach.

The given answer emphasizes the importance of management and resources in the acquisition of resources or development of competencies that can lead to a sustainable competitive advantage. Effective management is crucial in utilizing and leveraging available resources to their fullest potential, while also identifying and acquiring additional resources as needed. By effectively managing resources, a company can develop unique competencies that set it apart from competitors and create a sustainable advantage in the market. Therefore, management and resources play a critical role in achieving long-term success and competitiveness.

This answer is correct because the selection of business and portfolio management involves the allocation of resources such as capital, equipment, and research and development (R&D) to different business units. This process includes determining which businesses to invest in and how to manage the portfolio of businesses to maximize growth and profitability.

A concentration strategy refers to an approach where an organization focuses its resources and efforts on mastering one specific business and industry environment. This strategy involves dedicating all the company's resources, such as time, capital, and expertise, to excel in a single market segment. By concentrating on a specific business and industry, the organization can develop a deep understanding of the market, build strong capabilities, and gain a competitive advantage. This strategy allows the organization to specialize and become a market leader in its chosen field, rather than spreading its resources across multiple businesses or industries.

The answer "Selection of Business and Portfolio Management" is the correct answer because it aligns with the given topic of "Management of the corporate portfolio." Business and portfolio management involves the process of selecting and managing various businesses and projects within a corporate portfolio. This includes making strategic decisions on which businesses to invest in, divest from, or expand, as well as allocating resources effectively to maximize growth and profitability. Therefore, this answer accurately reflects the role of business and portfolio management in managing the corporate portfolio.

Related diversification refers to a strategy where a company expands its operations into new but related industries. This can lead to higher financial performance because it allows the company to leverage its existing resources and capabilities in new markets. By entering related industries, the company can benefit from synergies, economies of scale, and cross-selling opportunities. This diversification strategy reduces the company's dependence on a single industry and spreads its risk across different markets, potentially increasing its overall profitability and financial performance.

A concentration strategy refers to a business approach where a company focuses its resources and efforts on a single product, service, or market segment. This strategy can prevent oversized management by allowing the company to concentrate its resources and expertise on a specific area, rather than spreading them too thin across multiple areas. By focusing on a single area, the company can streamline its operations, optimize its resources, and achieve economies of scale, leading to increased efficiency and profitability.

The concentration strategy refers to focusing on a single business or product line to achieve maximum profitability. This strategy allows a company to allocate its resources and efforts towards a specific area, enabling it to develop expertise and gain a competitive advantage. By concentrating on a single business, the company can streamline its operations, reduce costs, and optimize its performance. This strategy is considered the most profitable because it allows companies to fully exploit their core competencies and dominate a specific market segment.

The given correct answer, "Management and Resources," suggests that one of the key factors in the development of an appropriate corporation structure is effective management and allocation of resources. This includes the ability to strategically plan and execute the direction of the corporation, as well as effectively utilize the available resources to drive diversification and growth. Without proper management and efficient resource allocation, it would be challenging for a corporation to establish a suitable structure and achieve its desired goals.